Nanny Tax Calculator
When you hire a household worker such as a nanny, housekeeper, cook, or gardener and pay them $2,800 or more during 2025 (the IRS threshold set in Rev. Proc. 2024-40), you become a household employer and are responsible for payroll taxes under Schedule H of Form 1040. As a household employer, you must withhold and pay the employee's share of FICA taxes at 7.65% (6.2% Social Security up to the annual wage base, plus 1.45% Medicare), and you owe a matching employer FICA contribution of 7.65%. You are also subject to the Federal Unemployment Tax Act (FUTA) if you pay the worker $1,000 or more in any calendar quarter, at an effective rate of 0.6% on the first $7,000 in wages after applying the typical state unemployment tax credit. Federal income tax withholding is optional unless the worker requests it using Form W-4. You report and pay these household employment taxes by filing Schedule H with your personal Form 1040 at the end of the year, not through a separate business payroll return. This calculator computes employer FICA, employee FICA, FUTA liability, estimated state unemployment insurance (at a rate you enter), optional federal income tax withholding, total employer cost, and the worker's estimated net take-home pay for the year.
Annual wages of $28,000 for a household employee trigger -- in FICA taxes and -- in FUTA taxes, totaling -- in employer costs.
How household employment taxes are calculated
Household employment taxes include employer and employee portions of Social Security and Medicare (FICA), federal unemployment tax (FUTA), state unemployment insurance (SUI), and optional federal income tax withholding. Social Security taxes apply only on wages up to the annual wage base ($176,100 in 2025). Medicare taxes apply to all wages. FUTA applies if you pay $1,000 or more in any quarter.
SS tax employer = min(wages, $176,100) x 0.062
SS tax employee = min(wages, $176,100) x 0.062
Medicare employer = wages x 0.0145
Medicare employee = wages x 0.0145
FUTA = min(wages, $7,000) x 0.006
SUI = wages x state rate
FIT withholding = (wages / pay periods) x per-period withholding
Employee net = wages - SS employee - Medicare employee - SUI - FIT
Employer cost = wages + SS employer + Medicare employer + FUTA
Worked example
Annual wages $28,000, biweekly pay, no FIT withholding, state SUI 2.7%:
- SS employer = min($28,000, $176,100) x 0.062 = $1,736
- SS employee = $28,000 x 0.062 = $1,736
- Medicare employer = $28,000 x 0.0145 = $406
- Medicare employee = $28,000 x 0.0145 = $406
- FUTA = $7,000 x 0.006 = $42
- SUI = $28,000 x 0.027 = $756
- Total employee deductions = $1,736 + $406 + $756 = $2,898
- Employee net pay = $28,000 - $2,898 = $25,102
- Employer cost = $28,000 + $1,736 + $406 + $42 = $30,184
Household employment record-keeping and compliance
Keep records of all wages paid, tax withholdings, and the employee's name, address, and Social Security Number. Issue a Form W-2 to the employee and file copies with the IRS by January 31st following the year of employment. Report household employment taxes on Schedule H (Form 1040), which you file with your personal tax return.
If household employment taxes will exceed $1,000 for the year, you may need to make estimated tax payments. You can add household employment taxes to your estimated quarterly payments using Form 1040-ES, or you can increase the federal income tax withholding from your own employment income or retirement distributions.
State unemployment insurance requirements vary. Many states require you to register as a household employer and remit state UI taxes separately. Check your state's labor department website for specific rules, registration requirements, and tax payment schedules. Some states allow you to pay state UI through your federal FUTA return, while others require separate filing.
Household employment taxes: frequently asked questions
What is a household employee and when do I have to pay household employment taxes?
A household employee is someone who works in your home, such as a nanny, babysitter, housekeeper, or health aide. You must withhold and pay employment taxes if you pay a household employee $2,800 or more in cash wages in 2025. You must report these taxes on Schedule H (Form 1040), which is filed with your personal income tax return, not separately.
What payroll taxes apply to household employees?
Three types of taxes apply: (1) Social Security tax at 6.2% on wages up to the annual wage base ($176,100 in 2025), capped at employer and employee combined; (2) Medicare tax at 1.45% on all wages with no cap; (3) Federal unemployment tax (FUTA) at 6.0% on the first $7,000 of wages, typically reduced to 0.6% by state unemployment insurance credit. Additionally, your state may require state unemployment insurance withholding.
Do I need to withhold federal income tax from a household employee's wages?
Federal income tax withholding is not required unless the employee requests it on a Form W-4. However, you may agree to withhold if the employee requests it. If you do withhold, it must be calculated based on the employee's W-4 and withheld from each paycheck. This is entirely optional but may be negotiated as part of your employment agreement.
What is the FICA threshold and Social Security wage base?
For 2025, you must pay FICA taxes if you pay a household employee $2,800 or more in cash wages during the year. Social Security tax applies only on wages up to $176,100 (the 2025 wage base). Medicare tax applies to all wages. If the employee has already earned $176,100 from other jobs, you still owe Medicare tax (1.45%) but not Social Security tax (6.2%) on their household wages.
What is FUTA and when must I pay it?
FUTA (Federal Unemployment Tax Act) taxes are employer-only taxes that fund unemployment insurance. You owe FUTA if you pay $1,000 or more in wages to household employees in any single quarter. The FUTA rate is 6.0% on the first $7,000 of wages per employee per year, but most employers receive a credit for state unemployment insurance contributions, reducing the effective rate to 0.6%.
How do I file Schedule H and when is it due?
Schedule H (Form 1040) is filed with your personal Form 1040 tax return on April 15th (or the extended due date if you request an extension). You do not need to file a separate payroll tax return for household employees. Schedule H reports total wages paid, FICA taxes, FUTA taxes, and other employment taxes. Estimated tax payments may be required during the year if household employment taxes will exceed $1,000.
Official sources
- Household employment taxes: IRS Publication 926.
- Schedule H instructions: IRS Schedule H (Form 1040).
- 2025 wage base and thresholds: IRS Rev Proc 2024-40.
- State unemployment insurance: Contact your state labor department for rates and filing requirements.
Reviewed by the CalculatorHub team, edited by James Graham, 13 June 2026. See our methodology. General information, not tax advice.